Digital FCU’s fintech greenhouse
Innovation Center establishes familiarity with new financial technology firms from the ground up.
$8.2 billion Digital Federal Credit Union, Marlborough, Mass., has signed a contract with one fintech startup and is running pilots with three others, reports CUES member David Araujo, CIE, CCE, the CU’s SVP/innovation. But he has a head start on his due diligence, because he watched these fintechs sprout in the credit union’s backyard.
Twice a year, Digital FCU accepts 10 new startups in its Boston-based FinTech Innovation Center. “We provide them free space for a year and help them establish connections that they need with venture capitalists, attorneys and accountants,” he explains. DCU doesn’t provide any other financial support.
“Having familiarity is important, because startups don’t have the normal experience, references and financials a CU would expect to see when evaluating a vendor,” Araujo says. “You have to view them differently because they’re still trying to figure out what their business should be. As they attract venture capital, run tests with live data and begin to pilot with established financial institutions, their value starts to emerge.” Which is why Digital FCU is running those pilots with three ventures that are ready to do real work. “We help them learn, but they help us learn too,” he observes.
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